Does the Pearce Bespoke franchisor determine the purchase price of a franchise transfer?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
see understands that Franchisor may communicate directly with the transferee-franchisee during the transfer process to respond to inquiries, as well as to ensure that the transferee-franchisee meets Franchisor's qualifications;
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- While Franchisor does not determine the purchase price, Franchisor may determine that the purchase price and payment terms will adversely affect the transferee-franchisee's operation of the Pearce Bespoke Franchise;
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- If Franchisee finances any part of the purchase price, Franchisee agrees that all of the transferee franchisee's obligations under any promissory notes, agreements, or security interests reserved in the Pearce Bespoke Franchise are subordinate to the transfereefranchisee's obligations to pay Royalty Fees or any other amounts due to Franchisor under the Franchise Agreement;
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- The transferee-franchisee successfully completes Franchisor's training program;
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, the franchisor does not determine the purchase price of a franchise transfer. However, Pearce Bespoke retains the right to assess whether the agreed-upon purchase price and payment terms could negatively impact the transferee-franchisee's ability to successfully operate the franchise. This provision allows Pearce Bespoke to protect its brand and the interests of its franchisees by ensuring that new owners are not entering into unsustainable financial arrangements.
Furthermore, if the franchisee finances any portion of the purchase price, the agreement stipulates that the transferee-franchisee's financial obligations, such as promissory notes or security interests, are subordinate to their obligation to pay royalty fees or any other amounts owed to Pearce Bespoke under the Franchise Agreement. This clause ensures that Pearce Bespoke's financial interests are prioritized in the event of a transfer involving financing.
To proceed with a transfer, the transferee-franchisee must successfully complete Pearce Bespoke's training program. Additionally, the franchisee is required to pay Pearce Bespoke a transfer fee. This fee is the greater of $10,000 or 25% of the then-current Initial Franchise Fee. This transfer fee compensates Pearce Bespoke for the expenses it incurs during the transfer process, including the costs associated with any necessary training. There is no transfer fee for transfers to immediate family members, such as a spouse or children.